The EUR/USD currency pair is still trading around the 1.1615 area, treading water in a very limited range since last Monday. The reticent nature of the trader’s range has slowed the pair’s advance. This is particularly so after the dollar index fell to a near-term bottom of 1.1542 on Wednesday. Traders are still watching the currency pair intently as the market continues to deal with the aftermath of a divided US political landscape. New irritants with China have only deepened their worries.
The EUR/USD pair is trading above a little bullish 20 Simple Moving Average (SMA). Getting past it all in the midst of bearish pressure from a downward-sliding 100 SMA under a flat 200 SMA. In this set-up, it is clear that there is not much energy for big leaps forward. The duo has a tough battle ahead to clear months of overhead resistance. The daily chart indicates that the currency pair is stuck around its daily opening, reflecting a broader uncertainty in the market.
The 100 SMA has done a good job at preventing any upward spikes around the 1.1640 area. This level is important because it serves as a key long-term resistance barrier. Additional resistance levels appear at 1.1680 and 1.1710. The support levels are seen at 1.1585, 1.1540 and 1.1500. The currently bearish 20 simple moving average is picking up momentum above the longer-term moving average. This is an indication that the market trend is downward-biased.
Market experts notice that the Momentum tool on the EUR/USD currency pair is just above the 100 level. At the same time, the Relative Strength Index (RSI) remains around 52, highlighting some risk-on/risk-off indecision from traders. The absence of direction illustrates that neither bullish nor bearish sentiment is prevailing with conviction at the moment. As such, the duo is stuck inside its self-imposed box.
The broader political landscape in the United States continues to be a major driver of market sentiment. Continuing talks about a possible government shutdown have added to the mood of unpredictability, which has a negative effect on investor sentiment. Indeed, disruptive political dynamics often introduce their own currency market volatility. Traders are hungry for any signs of clarity as a number of Federal Reserve officials are due to speak this afternoon in America. Their speeches, in turn, could bring more clarity as to what awaits for the monetary policy direction and thus have an impact on EUR/USD.